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London - British shares fell on Wednesday, led by commodity stocks, as oil prices soared on continuing turmoil in the Arab world, raising fears for the global economy.
However, strength from banks on well-received results from Standard Chartered and some short-term technical support helped limit losses.
By 1213 GMT, the FTSE 100 was down 23.71 points, or 0.4%, at 5,912.05, extending Tuesday's 1% decline. It has only risen on one day in the last eight trading sessions.
The index is down over 3% since February 21, when it touched its highest since May 2008.
Brent rose towards $116 a barrel on Wednesday on reports of Libyan government counter-attacks on rebel-held towns in the east of the country, heightening fears of a civil war in the world's 12th-largest oil exporter.
Standard Chartered, up 3.7%, led banks higher after it posted a 19% rise in profits and said it was off to a record start this year as China, India and other Asian markets boomed.
"There are some brighter spots like Standard Chartered, and corporate earnings have generally been strong, but attention is being drawn away from that to the oil price strength, which is adding to uncertainty," said Richard Hunter, head of equities at Hargreaves Lansdown.
US Federal Reserve Chairman Ben Bernanke said on Tuesday that the recent surge in oil was unlikely to derail the economy, but his comments did little to reassure investors worried that unrest in the Middle East could hit Saudi Arabia, the world's largest oil exporter.
Energy stocks were the biggest fallers as the benefits for them of a rise in crude prices were outweighed by fears that this would choke off demand.
Mining stocks were also weaker, with Xstrata and BHP Billiton down 0.7% and 0.5%, respectively.
The FTSE 100 volatility index, a barometer of investor anxiety, is up 8.3% for the week so far, after rising more than 18% last week. The higher the index, the lower investors' appetite for risky assets such as stocks.
Whitbread whipped
Whitbread was the sharpest faller, on high volume, down 3.9% after it reported a slowing rate of sales growth at its Premier Inn budget hotel chain.
Serco by contrast advanced 1.8% after the outsourcing firm posted what Shore Capital called "solid" full-year results. Shore Capital repeated its "buy" rating on the stock.
Rio Tinto, RSA Insurance, and Diageo all fell after going ex-dividend.
Technical factors have prevented sharper falls in the short term, but point to weakness further ahead, Nicole Elliott, technical analyst at Mizuho Corporate Bank said.
"There is decent support between 5 800 and 5 850," she said, adding that it had limited the downside since early December.
"Trouble is I think that since then we have also formed a 'rounded top', so pressure for a break below here is increasing," she said.
